On November 19, 2024, the Norwegian Government submitted a proposal (Consultation Request Report (in Norwegian)), including draft legislation, allowing municipalities on mainland Norway to impose taxes on hotels and other tourist accommodations, and allowing tourism fees at Longyearbyen, Svalbard.
The two departments responsible, the Ministry of Trade, Industry and Fisheries and the Ministry of Justice and Public Security, drafted the framework legislation with two main parts. One part, which relates to municipal taxes on accommodations, would only apply to mainland Norway. Another part, on visitor fees in Longyearbyen, Svalbard, would not apply in mainland Norway. (Consultation Request Report at 70-73.)
Municipal Taxes on Accommodations
The law would allow municipalities in mainland Norway to impose a tax on accommodations within their municipalities to cover costs for public goods. (1§ Proposed Law on Visitor Fees, Consultation Request Report at 70.) Section two of the proposed legislation states:
Municipalities may impose an accommodation tax on the turnover of accommodation services in the municipality with the purpose of financing tourism-related public goods. The tax may be imposed on short-term rentals, here defined as accommodation services where the rental period is shorter than 30 consecutive days. (2 §, (all translations by author).)
The tax would be based on the cost of the hotel stay. (8 §.) Section 8 of the proposed law provides:
The accommodation tax is calculated as a percentage surcharge on the consideration paid for accommodation, excl. VAT.
The municipal council shall decide on the percentage rate as mentioned in the first paragraph. The percentage rate may not be set higher than five percent and may not be differentiated throughout the calendar year. (8 §.)
Visitor Fees in Svalbard
As part of its report on Svalbard to Parliament (Meld. St. 26 2023-2024 Svalbard), the Norwegian Government announced in May 2024 that it intended to develop a legal framework for collecting fees from tourists that visit Longyearbyen, in order to recoup costs tied to infrastructure.
As proposed in Consultation Request Report, the fees on visits to Svalbard would be paid to the Norwegian government but would benefit Longyearbyen local government. In contrast to the proposed tourist tax applicable in mainland Norway, the fees on visits to Longyearbyen would be levied also on visitors disembarking cruise ships, because most tourists that visit Longyearbyen arrive and stay on cruise ships. The government also notes that the costs related to creating and maintaining public infrastructure in the Arctic are higher than in mainland Norway. (Consultation Request Report at 62-64.)
The proposal for Svalbard leaves open whether the fee should be a fixed fee or a percentage of the accommodation cost and asks stakeholders to comment. As accommodation costs in Svalbard vary significantly by season due to fluctuating demand, a fixed fee regardless of season would mean the fee would be a larger proportion of the price in the off-season compared to the high season, which the government notes may warrant adopting a percentage fee. (Consultation Request Report at 66.)
After receiving comments on the proposal, the government will develop and send the regulation on Svalbard tourism fees for a separate stakeholder review. (Consultation Request Report at 67.)
Request for Comment
The government requested feedback on the legislation from several stakeholders, including municipalities, public agencies, and tourism industry businesses operating in Norway such as Airbnb. Private persons may also submit individual responses. Responses must be submitted by January 3, 2025.
Elin Hofverberg, Law Library of Congress
December 13, 2024
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